Samsung's agreement with Digital to design and manufacture Alpha microprocessors is "worthless", according to a senior industry analyst. Samsung announced its plans to manufacture Alpha processors less than a week after Intel's agreement to buy Digital's Hudson semiconductor plant, which also manufactures Alpha chips. Joe D'elia, senior analyst at Dataquest, rubbished Samsung's deal as a "worthless piece of paper", believing Samsung's overzealous efforts to get into the Alpha market will leave it with only one customer for the chips. "Samsung can only sell the chips to Digital and Digital is more likely to buy Alpha parts from Intel when it gets up and running with the new fab," he declared. If D'elia is right, Samsung could be left with an inventory of high speed chips it cannot sell. This is despite the advantages to Samsung delivered by the deal. Last week Samsung announced it will begin sampling 700MHz Alphas by next year, a full six months to a year before Intel can catch up. Samsung is also manufacturing the designs on a 0.25 micron process, while Intel plans to use a 0.35 micron process, effectively giving Samsung a technological lead. Ken Jones, sales director for Samsung's semiconductor business, denied that his company would rely on orders from Digital. "D'elia's comments are completely unfounded," he said. "We have no intention of selling only to Digital. We will be selling the majority of these chips to relatively small system manufacturers who need bespoke systems. We are not interested in off-the-shelf systems." He could not say in what volumes the company expects to manufacture the chips. D'Elia countered that the bespoke market is not large enough to make the deal worthwhile.
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